Bosideng eyes 300 Rocawear outlets in Greater China
Updated: 2009-05-30 07:44
(HK Edition)
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HONG KONG: Rocawear, a brand co-founded by American rapper Jay-Z, may have 300 stores on the mainland in three years after its owner entered into a venture with Bosideng International Holdings Ltd, the country's biggest maker of down jackets.
Bosideng will partner with Iconix China Ltd to sell the Rocawear range of men's and women's products on the mainland by next year, the maker of down clothing said in a statement to Hong Kong's stock exchange Friday. Bosideng fell 1 percent to HK$1.04 in Hong Kong trading.
"They're targeting the high-end down market and the venture can help make the clothes more fashionable," Eva Chun, associate director at Kingsway International Holdings Ltd in Hong Kong, said today. "Bosideng has the funding and it's good that they're expanding through acquisitions and ventures."
Bosideng founder and chairman Gao Dekang is seeking acquisitions and partnerships to boost earnings. The company plans to open more than 300 Rocawear outlets in the Greater China region, it said in its statement. The profit margin of Rocawear owner Iconix Brand Group Inc is 31 percent, more than seven times better than Bosideng's, according to data compiled by Bloomberg.
Bosideng earlier this week said it completed the 650 million yuan ($95 million) acquisition of a menswear maker, Ying Fai International Investment Ltd. The mainland down-clothing company paid 80 percent in cash and will pay the balance as the acquired company reaches earnings targets.
Rocawear was founded in 1995 by 38-year-old rapper Shawn Carter, who is also known by his stage name Jay-Z, and fellow musicians Damon Dash and Kareem "Biggs" Burke. Jay-Z's most recent album is "American Gangster" and his hits include "Hard Knock Life (Ghetto Anthem)" and "Big Pimpin".
Iconix paid $204 million in 2007 for Rocawear Licensing LLC's Rocawear brand names, trademarks and intellectual property. Rocawear had annual retail sales of more than $700 million at the time, according to Iconix, which had also said Jay-Z will remain in charge of the brand's product development, marketing and licensing.
Iconix China is a venture between New York-based Iconix Brand Group and Novel Fashion Holding Ltd, the Bosideng statement said.
Bosideng will own 78 percent of the joint venture and Iconix China will hold the rest.
Bosideng shares have gained 42 percent this year, compared with 26 percent for the benchmark Hang Seng Index.
Bloomberg News
(HK Edition 05/30/2009 page2)